Legislators unable to land budget deal

CARSON CITY — Legislative leaders unsuccessfully attempted to reach an agreement Monday to remedy the state’s $250 million budget shortfall before Friday’s special legislative session.

Assembly Speaker Barbara Buckley, D-Las Vegas, Assembly Ways and Means Chairman Morse Arberry, D-Las Vegas, and Senate Majority Leader Bill Raggio, R-Reno, met at an undisclosed location in Southern Nevada to work on a bipartisan compromise.

Several other unidentified legislators also attended the meeting.

"We haven’t reached an agreement," Raggio said Monday night. "We will be meeting again tomorrow. Today is a good starting point."

Lawmakers are looking for ways to cut state spending by $250 million or more. That is on top of $913 million in cuts already made to the current 2007-2009 budget, bringing the total cutbacks to nearly $1.2 billion.

"This is our first conversation," said Assemblywoman Sheila Leslie, D-Reno, who did not attend the meeting. "There is a lot of grinding work that has to be done."

One option involves delaying 4 percent cost-of-living raises for state employees, teachers and university staff, a move that would save the state $130 million.

Leslie said that Democrats will not support that option. The cost-of-living adjustments, COLAs, are to take effect July 1.

School Board members for the Clark County School District are expected to decide Thursday whether to ratify a contract with teachers that includes the cost-of-living increase. Other Nevada school districts already have teacher contracts in place.

Superintendent Walt Rulffes previously was told by Josh Hicks, chief counsel for Gov. Jim Gibbons, that legislators still could consider delaying or cutting the COLAs, said Ben Kieckhefer, Gibbons’ spokesman.

Hicks told Rulffes that changes to the COLAs could be made during the special session, but Hicks did not ask the superintendent to delay teacher contract ratification, Kieckhefer said.

Last week, Nevada State Education Association President Lynn Warne said her organization would sue school districts that do not include the 4 percent cost-of-living increases in teacher checks sent after July 1.

Warne maintained that local unions negotiated in good faith with district administrators and that teachers ratified the agreements.

Raggio and Leslie both said the state’s shortfall might be worse than the $250 million figure estimated last week by the Economic Forum, a group of private business leaders that determines how much in tax revenue is available for state government to spend.

State law requires that the revenue estimates made by the forum during regular legislative sessions be followed, but neither the governor or legislators have to use those figures during the coming special session.

Leslie said legislative financial analysts — who initially thought the shortfall was $95 million — are recalculating the forum’s latest projections.

The new deficit might exceed $250 million, perhaps going as high as $280 million, Raggio said.

"We still don’t have a final target number," Raggio said.

Gibbons has called a three-day special session — to begin Friday — to look at where the latest cuts can be made.

Both he and legislators hope to find a way to make cuts without having to lay off state employees.

Hicks said last week that the governor would not support any proposals to increase taxes.

The special session is coming at a time when state unemployment has reached 6.2 percent, the highest in 14 years, and total state tax revenues have declined compared with the previous year for the first time in at least 30 years.

Review-Journal reporter Sean Whaley contributed to this report. Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.